Ontario Incorporation Checklist
Before you begin to actually incorporate your business, there are several decisions you need to make, and certain information that you must have available. This checklist should help.
Is an Incorporation Needed?
An incorporated company is only one of several different ways for you to carry on business. Two other very popular methods are through a sole proprietorship or through a partnership. Follow this link for more information on methods of carrying on business. You should review the matter with your accountant or financial consultant, as the method you choose can have important tax consequences.
It is important to be aware of the tax implications of incorporation. Please check with your accountant on this subject.
Federal or Provincial Incorporation
You usually have an option as to whether to incorporate a federal or a provincial corporation. There are advantages and disadvantages to both. For a more detailed review, please see our comparison of Ontario and Canada incorporations.
Name of Company
Although it is possible to incorporate as a numbered company, e.g. 1234567 Ontario Inc., most small businesses use a name. In Ontario, the government does not ‘approve’ names for incorporation. It is left up to the applicant to be sure that they are not using a name that would be confusing with another business or a trade-mark. The Ontario government also requires that you submit a NUANS Name Search report with your application for incorporation. More information on corporate names.
Type of Shares
A corporation is a separate legal ‘person’, and as such it owns all the assets of the corporation. The ownership of the corporation itself is divided into pieces or ‘shares.’ In general, there are three types of rights associated with shares: the right to vote, the right to receive dividends and the right to receive the remaining property of the corporation upon dissolution. These rights can be divided among two or more types or classes of shares. You must know what classes of shares you will have before your incorporation. More information on shares.
The people who own the pieces or ‘shares’ of the corporation are called the shareholders. You should know who the shareholders are, and the number and class of share to be issued to each shareholder. More information on shares.
The Directors are elected by the shareholders to manage the affairs of the corporation. For an Ontario corporation, the majority of directors must be ‘resident Canadian.’ More information on directors.
It is required that a corporation have at least a President and a Secretary. They need not be shareholders or directors. More information on officers.
The registered office of a corporation is where the registers and records of the corporation must be kept. For an Ontario incorporation, the office must be located in Ontario. A rural route number may be used but not a post office box number. Most small businesses have their registered office either at the primary place of business, or at the home of the principal.
Do It Yourself or Hire Someone
Once you’ve reviewed this checklist, it’s time to decide whether to file the incorporation yourself, or hire someone else. Many companies offer online incorporation services. There are basically three types of service:
- Non-Legal: With no legal credentials, these basically provide the forms to be filled out, with instructions. The forms are also available online at government sites. These tend to be the least expensive.
- Paralegal: These people do have legal training and some experience and are more likely to provide a better service. However, they can provide no legal advice, usually don’t carry negligence insurance, and in most cases are unregulated.
- Legal: Legal advice and services are provided by a certified lawyer. Insurance is mandatory, and the profession is regulated. Usually the more expensive option. If you have a lawyer you already trust, we recommend using him/her. If you need a lawyer, we would be happy to offer you our unique online services.
If you have any questions, please do not hesitate to contact us.